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Why Few short trades


#1

I track alot of the Futures strategies and notice that either they take ONLY Long trades, or if they go Short it is pretty rare. I understand that the long term performance of US Equities is Long, but there are so many opportunities to Short.

Anyone have an explanation?


#2

Any good shorters would be rich and not need c2. Any bad shorter would have been bankrupted over the last 10 year bull market.


#3

There’s a short only strategy that’s done really well this year, AlgoFolio Short. Only thing I don’t like is that a few trades show large single-trade drawdowns (>8%) and somewhat Martingale-like behavior.


#4

yes I have looked at Algo Short… I guess what I would really like to find is a strategy that goes short as well as long… there are some that go short , but it is really the exception


#5

I’m a high conviction trader. I give my positions space to trade. To make money on the short side one needs to be right, to be right you need to be early, often when one is early it appears they’re wrong, until they’re proven right. The strategy is negatively correlated to the SP500 and consistently generated positive returns in what was generally a rising market.
The Martingale tag is spurious, there hasn’t been any doubling up on losers. That term gets tossed around too easily on these boards, even so it doesn’t apply to AlgoFolio Short.
In a portfolio context allocating to AlgoFolio Short in addition to one or more long only strategies helps to lower the overall Beta while adding Alpha. That is what it is designed to do.


#6

Well, sometimes it’s hard to know whether a trader is scaling into positions in a structured fashion or cost-averaging/Martingaling. I looked at some of your large drawdown trades and it looks like you did add size to trades that were under water. That being said, after reading your post above, I went back to the strategy page and it looks like you add size to winners as well. So, it would seem that you scale in to positions.

Either way, it looks like AlgoFolio Short cleaned house this year. Today was a great day. Would you consider this an exceptionally good year by your standards?

Also…you said you’re a high conviction trader and that you need space for position to play out. How do you manage risk/losers? It doesn’t sound like you employ fixed stops.


#7

I am lucky to have subscribed to AlgoFolio since June and I was the first subscriber. My portfolio is quite large and I had subscribed to a lot of systems on C2. Every single one of them have failed so far and most have failed miserably in these testing markets. Excepting for Algofolio. He has maneuvered the market skillfully in both up and down rally’s. He has exceptional depth and I strongly believe would be among the best of the handful of traders on C2 who call themselves ( profitable) Traders.


#8

My system TRADUS trades both long and short the mini SP500 !


#9

OH BOY! Algo short just took some MONSTER losses… no way could I sustain that kind of loss


#10

Its a short only strategy which works well in bearish markets…unfortunately I think it took too big a gamble on the bearish side these last few days which were bullish. The one 50k loss is sad since it looks like he probably had a huge stop or none at all.

In current market conditions, its best to be prepared for bearish and bullish moves since its unlikely we are going to get long sustained moves in either directions going forwards.


#11

YUP>… I trade futures and a almost 400 point loss per contract on NQ is crazy, maybe I could stand a 50 point stop… but 400? yeah, like no stop…


#12

Its a shame too, he had like a 20k profit in that thing if he had closed it out around Christmas.


#13

Seems the trade leader doesn’t know anything about breakeven stops if thats the case…lol


#14

I sound like a broken record: Even the best strategies can fail or go through unacceptable draw downs, so it is imperative that you constantly monitor your systems and take actions when necessary, in this case set your own stop loss.


#15

you got your answer quite fast - the only good thing is at least it had a stop even if it was very wide


#16

you jinxed it :roll_eyes: the day you wrote the above, coincides with the high watermark


#17

Looks like that last trade generated a margin call as well. These large occasional losses seem most common on no-stop loss systems trading leveraged instruments, even more so if they add to positions. I think that combination of features might be enough to disqualify a system.


#18

Dr Martin Gale said when a trade go against you after buying lower 5 times margin will go bye bye.


#19

you are right. I am upset as well as surprised at this huge drawdown . He had been very steady for all of last year. I pray he recovers but we need to be very careful on allocations and i definitely agree a good past does not guarantee a steady future.

i believe for C2 is not exactly for someone like us who are novice investors looking for good returns. You also need to understand the nitty gritty of trading or you can get nuked. discussion on these forums are great and most of you sound knowledgeable. hands off guys like us are better off investing with fund management companies/hedgefunds etc.

C2 is a lot of stress and i am beginning to realise it is not worth the risk.


#20

not a good idea. sometimes it is better to accept the loss and move on. As you said you joined in June, so you had not lost your initial capital.


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